Doing some general property surfing and came accross this: http://www.realestate.com.au/property-unitblock-qld-berserker-120646681 Located in Berserker, Rockhampton. Looked into the property cycle there and seems that prices have taken a hit recently, due to mining i can only presume at this stage. Vacancy rates seem manageable and given its 4 units i couldn't think they would all be vacant at once - even if two were tennanted it would be enough to hold on to. Huge land, possiblity to add sheds / more units - rent them out? Its grossing 10% yields using agents figures in listing and pictures i can find on the net seem there is basic cosmetic things that could be done and a good PM would maybe get this marketed a bit better and further increase rents + capital growth. Doing some surfing on the net it looks to me after looking at various resources i have that is was poorly marketed (from an armchair view). So i'm curious as to what peoples thoughts are on this one. starta oppurtunity for immediate sales? cosmetic reno's to increase yield + capital growth?
You might want to check the flood maps first, as some parts of Rocky are affected. I bought in Frenchville many years ago but recall taking a physical map with me to check....
Investar is indicating it would put $248/wk in your pocket . Although APM is valuing it at $252k. On the McGrath website it's saying its under contract.
As well as the above mentioned advice from @Jacque and @AlexH It's also important to think about financing ability for units. There is a thread here somewhere that talks about the difficulties in getting finance for a unit block. Just something to think about.
Finance may be an issue - you are limited by the number of lenders that will take on 4 units on single title such as CBA, RAMS, Bankwest and St George. The biggest issue you will find with finance is going to be the valuation and the lack of comparable sales for the valuer. I would investigate whether finance is possible based on your circumstances before proceeding. Neither of those lenders have generous servicing with the exception of St George and they will want a lower LVR anyway so definitely not an easy application to get across the line.
Yes all valid, say financing is not an issue. I was more concerned about the property deal itself. With the low entry point, high yields in their current state + possible options to add further dwellings,strata title, cosmetic renos or even larger scale reno's it still ooks good from the surface and price range. Still cant find too many negatives unless further investigation found insurance quotes to be rediculous. There is no body corp and only would have one set of rates being on one title.
For the price, and yield, your looking for "what have you missed" as to why it's not gone... Yes likely not a lot of capital growth until you developed it further, and that may be the problem, as in council/development issues.. Just a thought
It's under contract. By the way have you checked rates for this property? I think your yield might take a good hit. http://www.mcgrath.com.au/buy/block-of-units-berserker-qld-4701/267492
Good land content and price. Is it clear of flooding? I prefer solid single story full duplexes or small brick/ block unit blocks in Rocky as these are easier to rent and are much lower maintenance. That place is essentially a house split into 4 flats with a shared laundry. You would be looking at ordinary tenants most likely IMO. The market is weak at the moment with an elevated vacancy rate presently, we have had to drop rents there by up to 10% but don't have any vacancies there presently across a few properties. Rates are expensive in Rocky and I assume insurance premiums will rise after the first cyclone hitting Rocky in about 50 years. Yields are good and long term it will bounce back, it has been a solid performer for a long time but it has been very weak over the last 5 years. The local economy has more diversity than some of its regional neighours. Could be an opportunity to pick up a good deal in a depressed market but I can't see any short term growth drivers, it historically has moved after booms in SEQ.
Make sure you factor in insurance and rates, they're killers up there! For this place, they'd probably be north of $10k pa.
